INCOME TAX 2015 ON PASSIVE INCOME

Personal tax credit and additional tax credits (based on the personal tax credit) for the taxpayer’s family circumstance

Dependent allowance for children below 18 years of age

Old age allowance and disability allowance

Unemployment allowance

Life insurance premiums up to 25%

National insurance contributions

RENTAL INCOME
Rental income is taxed at progressive rates. The taxable income is computed by deducting income-generating expenses from the gross income. Allowable deductions are depreciation, building insurance, municipal duties, management charges, maintenance and repairs. Depreciation rate is 2% per annum.

Rental income from residential apartments not exceeding NIS5,070 (US$1,268) per month or NIS60,840 (US$15,210) per year is exempt from income tax.

CAPITAL GAINS
Most properties sold in Israel are exempt from capital gains tax. If the gains are taxable, the net gain is taxed at the standard income tax rates.

The taxable capital gain is computed by splitting the capital gains into its real and exempt inflationary components. The inflationary portion of the gain is computed by applying the Israeli Consumer Price Index (CPI) to the cost of the capital asset. The inflationary portion was charged at 10% on the amount accruing up to 31 December 1993. No tax is levied on the inflationary portion accruing since that date.

PROPERTY TAX

Property taxes are no longer levied in Israel.

CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by companies are subject to corporate income tax at a flat rate of 24%. Income-generating expenses are deductible when calculating taxable income.

Israel - More data and information

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